Gilead Fourth-quarter Profit Gains On Aids Medicines
Fourth-quarter net income increased to $568.2 million, or 60 cents a share, from $401.6 million, or 41 cents, a year earlier, the Foster City, California-based company said today in a statement. Excluding costs, earnings were 63 cents a share, beating the 56-cent average estimate of 25 analysts surveyed by Bloomberg.
Revenue rose 30 percent to $1.43 billion. Gilead derives 84 percent of its sales from its AIDS drugs, which are taken by more than two-thirds of U.S. patients on treatment and 1 million people worldwide. A push to test more people for HIV, the virus that causes AIDS, and treat them earlier has helped fuel increased use of the medicines, said William Tanner, an analyst with Leerink Swann & Co. in New York in an interview on Jan. 21.
“Its fair to say theres been some good tailwind for the HIV franchise in 2008,” said Tanner.
Gilead sales also are benefiting from studies last year that showed rival drugs Epzicom and Ziagen by GlaxoSmithKline Plc may be linked to treatment failure or heart attack risk, Tanner said.
Sales of the companys top-selling drug Truvada rose 25 percent to $562.1 million. Gileads three-drug combination AIDS pill Atripla had sales of $465.5 million, a 79 percent increase.
2009 Outlook
Gilead expects 2009 sales to increase 16 percent to $5.9 billion to $6 billion, said Robin Washington, Gileads chief financial officer, today in a call with analysts. That is less than the $6.4 billion average estimate of 25 analysts surveyed by Bloomberg. Low estimates are consistent with past company guidance, Tanner said.
“They have a history of being conservative,” Tanner said in an interview after the conference call. “For 2008, what they put out, they beat.”
Norbert Bischofberger, executive vice president and chief scientific officer, said during the call that Gilead received “positive feedback” from the U.S. Food and Drug Administration about the companys plans for a trio of studies of its new antiviral drug elvitegravir, a booster compound, and its new Quad-combination pill for HIV.
Flattened Sales
A draw down of inventory in the fourth quarter flattened sales, said Kevin Young, executive vice president commercial operations, during the conference call.
Reauthorization of the Ryan White Care Act by Congress may broaden access to AIDS drugs, Gilead President John Milligan said in an interview. It will also provide more funding for HIV testing and identify more people with the virus, many of whom will enter treatment, he said.
Gilead is trying to broaden its revenue base by diversifying its product lines around hepatitis, hypertension and respiratory diseases. In the second quarter, the company is expected to release study results on darusentan, a new treatment for drug- resistant high blood pressure. The study is part of the final phase of testing generally required for U.S. approval. Tanner said he envisions a market of about 2 million people for darusentan, with multibillion dollar sales potential.
New Studies
Gilead expects to begin efficacy studies of its new four- drug Quad combo pill in the second quarter of this year. The medicine is built around Gileads new medicine, elvitegravir, which is designed to block an enzyme the AIDS virus needs to integrate itself into its victims genes.
Gilead shares fell $1.18 to $47.05 at 4:24 p.m. in extended trading on the Nasdaq Stock Market. The shares fell 16 cents, or less than 1 percent, in regular trading.